Spending on necessities, 2000

June 24, 2003

The share of average annual expenditures consumers used to purchase food shows a general decline as income increases; the expenditure share for housing declines more markedly as income goes up, while the share of expenditures for apparel does not vary much at all with income.

The share of average annual expenditures used to purchase food declines from 14.9 percent to 11.6 percent as income increases from the third quintile to the fifth quintile. However, consumer units in the first quintile allocate a smaller proportion of total spending to food (14.9 percent) than do consumer units in the second quintile (15.7 percent).

Expenditure shares for housing clearly decline across income quintiles. Consumer units in the lowest income quintile devote almost 30 percent of their total spending to housing, while those in the highest income quintile spend 22 percent.

The shares of average annual expenditures allocated to apparel are barely discernible from one another. In fact, the range of apparel shares is less than 1 percentage point, from 4.7 percent spent by those in the lowest income quintile to 5.3 percent spent by those in the highest income quintile.

The Consumer Expenditure Survey is the source of these data. Find out more in "Consumer expenditures for selected items, 1999 and 2000," Monthly Labor Review, May 2003. For this analysis of necessities, only shelter and utilities costs are included in housing; other housing-related expenditures, such as those on household furnishings and equipment, are excluded. These statistics are calculated with data from complete income reporters. The first quintile consists of the 20 percent of consumer units with the lowest total income; the fifth quintile consists of the 20 percent with the highest.